William, a journeyman carpenter with an associate's degree in civil engineering, had been making $33 comma 475 per year as a carpenter for a building contractor. As a self-employed subcontractor, William incurred explicit costs of $265 comma 000 per year. What is William's economic cost? His economic cost is $ nothing per year. (round your answer to the nearest penny)

$265,000

Explanation:

Economic cost is the addition of implicit cost and explicit cost. That is,

Economic cost = Explicit cost + Implicit cost (1)

Explicit costs are payments that are actually made. It is also known as out-of-pocket costs.

Implicit cost is an implied cost because they are not actually paid. Implicit cost is a loss of income, but a loss of profit. An example is an opportunity cost.

Since we are not given implicit cost in the question, equation (1) is estimated as follows:

Economic cost = $265,000 + 0 = $265,000

Therefore, William's economic cost is equal to his explicit cost of $265,000.

the third answer is correct.